The Adrian Cadbury

report
The Origins of the Report
The report was about a Committee on the Financial Aspects of Corporate Governance,
forever after known as the Cadbury Committee, which was established in May 1991 by the
Financial Reporting Council, the London Stock Exchange, and the accountancy profession.
The following were the reasons for Committee's creation:

1) Shareholders were increasingly losing confidence in the honesty and accountability of

listed companies
2) The collapse of the Bank of Credit and Commerce International and exposure of its
widespread criminal practices, and the posthumous discovery of Robert Maxwell's
appropriation of £440m from his companies' pension funds as the Maxwell Group
filed for bankruptcy in 1992.

Various topics discussed

1) The principles which the committee follows are: openness, reliability, integrity

2) Compliance: all enlisted companies have to report every year about their compliance
with rules set by Cadbury committee. In case of any non-compliance or conflict, a
proper reason should be stated.

3) Shareholders: they should elect the chairman and directors, institutional shareholders
are those who are members of the company but own shares. They should concentrate
more on progress of company than selling their shares. Share holders being owners
have the right to check compliance of company with the codes.

Kumar Mangalam report

The Origins of the Report
Kumar Mangalam Birla Committee on May 7, 1999 is appointed by the SEBI on Corporate
Governance under the Chairmanship of Shri Kumar Mangalam Birla

Reasons for setting the committee

 1) some Indian companies have high standards of corporate governance & some have
low

2) some are not attentive to shareholders’ service

Various topics discussed

1) Recommendations: enforcement of companies act, amending security contract rules
and stock exchange listing

2) Rules are set for the the board, the chairman, the secretary, the audit committee etc.

3) Their rights: they should be well informed about the company activities, meetings
should be at convenient timings and so on

4) Manner of implementation: finally the SEBI explains how the rues and procedures
should be implemented by the committee conveniently.

Comparative analysis of both

Similarities
1) Both are about committees established in respective countries

2) Both the committees are for welfare of shareholders

3) Both emphasise on corporate governance

4) Shareholders rights are enlisted

 Differences
Adrian Cadbury report Kumar Mangalam report

1. More topics covered 1. Less topics covered

2. Meaning of corporate governance is mentioned 2. It is not mentioned

3. The board members are classified into more 3. They are classified into less
number of categories categories